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THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. PAULA ZAHN, CNN ANCHOR: Let's first go to British Prime Minister Tony Blair who's speaking to a Labor Party conference in Brighton, England.

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TONY BLAIR, BRITISH PRIME MINISTER: Thank you to you and to all the cabinet indeed, being such a support and strength of this time. I am very proud of the work that you do for our country, and I know this party is very proud of the work that you do.

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Conference (ph), in retrospect, the millennium marked a moment in time, but it was the events of the 11th of September that marked a turning point in history, where we confront the dangers of the future and assess the choices facing humankind.

It was a tragedy, an act of evil. And from this nation goes our deepest sympathy and prayers for the victims and our profound solidarity for the American people.

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We were with you at the first, we will stay with you to the last.

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Just two weeks ago in New York, after the church service, I met some of the families of the British victims. And it was in many ways a very British occasion: tea and biscuits, rainy outside and around the edge of the room, strangers making small talk, trying to be normal people in a very abnormal situation. And as you crossed the room, you felt the longing and the sadness, hands that were clutching photos of sons and daughters, wives and husbands imploring you to believe that when they said there was still an outside chance of their loved ones being found alive, it could be true, when in truth, you knew that all hope was gone.

And then a middle-aged mother looks you in the eyes and tells you that her only son has died and asks you, "Why?"

And I tell you, you do not feel like the most powerful man in the country at times like that because there is no answer. There is no justification for the pain of those people. Her son did nothing wrong. The woman, seven months pregnant, whose child will never know its father, did nothing wrong. And they don't want revenge. They want something better in memory of their loved ones.

And I believe that their memorial can and should be greater than simply the punishment of the guilty. It is that, out of the shadow of this evil, should emerge lasting good.

Destruction of the machinery of terrorism, wherever it is found, hope amongst all nations of a new beginning, where we seek to resolve differences in a calm and ordered way, greater understanding between nations and between faiths and, above all, justice and prosperity for the poor and dispossessed, so that people everywhere can see the chance of a better future through the hard work and creative power of the free citizen, not the violence and savagery of the fanatic.

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I know that people here in Britain are anxious, even a little frightened. I understand that. People know we must act, but they worry what might follow. They worry about the economy and the talk of recession, and of course, there are dangers. It is a new situation.

Of the fundamentals of the U.S., the British, the European economies are strong. Every reasonable measure of internal security is being undertaken.

Our way of life is a great deal stronger and will last a great deal longer than the actions of fanatics, small in number, are now facing a unified world against them. People should have confidence. This is a battle with only one outcome: our victory, not theirs.

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What happened on the 11th of September was without parallel in the bloody history of terrorism.

BLAIR: Within a few hours, up to 7,000 people were annihilated, the commercial center of New York was reduced to rubble and, in Washington and Pennsylvania, further death and horror on an unimaginable scale. And let no one say, this was a blow for Islam, when the blood of innocent Muslims was shed along with those of the Christian, Jewish and other faiths around the world.

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We know those responsible. In Afghanistan are scores of training camps for the export of terror. Chief amongst the sponsors and organizers Osama bin Laden. He is supported, shielded, and given suckle (ph) by the Taliban regime.

Two days before the 11th of September attacks, Masood, the leader of the opposition Northern Alliance was assassinated by two suicide bombers. Both were linked to bin Laden. Some may call that coincidence. I call it payment, payment in the currency these people deal in: blood.

Be in doubt at all, bin Laden and his people organized this atrocity. The Taliban aid and abet him. He will not desist from further acts of terror. They will not stop helping him. Whatever the dangers of the action we take, the dangers of inaction are far, far greater.

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Look, for a moment, at the Taliban regime. It is undemocratic. That goes without saying. There's no sport allowed or television or photography, no art or culture is permitted. All other faiths, all other interpretations of Islam are ruthlessly suppressed. Those who practice their faith are imprisoned. Women are treated in a way almost too revolting to be credible.

First, driven out of university, girls not allowed to go to school, no legal rights, unable to go out of doors without a man. Those that disobey are stoned. There is now no contact permitted with Western agencies, even those delivering food. The people live in abject poverty. It is a regime founded on fear and funded by the drugs trade. The biggest drugs horde in the world is in Afghanistan, controlled by the Taliban.

Ninety percent of the heroin on British streets originates in Afghanistan. The arms the Taliban are buying today are paid for with the lives of young British people buying their drugs on British streets. That is another part of their regime we should seek to destroy.

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So what do we do? Don't overreact, some say. We aren't. We haven't lashed out. No missiles on the first night, just for effect. Don't kill innocent people. We are not the ones who raged war on the innocent. We seek the guilty.

BLAIR: Look for a diplomatic solution. But there is no diplomacy with bin Laden or the Taliban regime. State an ultimatum and get their response. We stated the ultimatum. They haven't responded. Understand the causes of terror. Yes, we should try. But let there be no moral ambiguity about this: Nothing could ever justify the events of September 11, and it is to turn justice on its head to pretend it could.

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The action that we take will be proportionate, targeted. We will do all we humanly can to avoid civilian casualties, but understand what we are dealing with. Listen to the calls of those passengers on the planes. Think of the children on them told they were going to die. Think of the cruelty beyond our comprehension, as amongst the screams and the anguish of the innocent, those hijackers drove at full throttle planes laden with fuel into buildings where tens of thousands of people work. They have no moral inhibition on the slaughter of the innocent. If they could have murdered not 7,000 but 70,000, does anyone doubt they would have done so and rejoiced in it?

So there is no compromise possible with such people. There is no meeting of minds, no point of understanding with such terror. Just a choice: defeat it or be defeated by it. And defeat it, we must.

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Any action taken will be against the terrorist network of bin Laden. As for the Taliban, they can surrender the terrorists or face the consequences. And again, in any action, the aim will be to eliminate their military hardware, cut off their finances, disrupt their supplies, target their troops, not civilians. We will put a trap around the regime. And I say to the Taliban: Surrender the terrorists or surrender power. That is your choice.

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We will take action, too, at every level national and international. In the U.N. the G-8, the European Union, in NATO, in every regional grouping in the world to strike at international terrorism wherever it exists. For the first time, the U.N. Security Council has imposed mandatory obligations on all U.N. members to cut off terrorists financing and end safe havens for terrorists.

Those that finance terror, those that launder their money, those that cover their tracks are every bit as guilty as the fanatic that commits the final act.

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And here in this country and in other nations around the world, laws will be changed, not to deny basic liberties, but to prevent their abuse and protect the most basic liberty of all, freedom from terror.

New extradition laws will be introduced. New rules to ensure asylum is not a front for terrorist entry; this country is proud of its tradition in giving asylum to those fleeing tyranny -- we will always do so -- but we have duty to protect the system from abuse. It must be overhauled radically, so that from now on those who abide by the rules, get help, and those that don't, can no longer play the system to gain unfair advantage over others.

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Around the world, the 11th of September is bringing government and people to reflect, consider and change. And in this process, amidst all the talk of war and action, there is another dimension appearing, there is a coming together; the power of community is asserting itself. We are realizing how fragile are our frontiers in the face of the world's new challenges.

Today, conflicts rarely stay within national boundaries. Today, a tremor in one financial market is repeated in the markets of the world. Today, confidence is global, it's presence or its absence. Today, the threat is chaos, because for people with work to do and family life to balance and mortgages to pay and careers to further pensions to provide, the yearning is for order and stability. And if it doesn't exist elsewhere, it's unlikely to exist here.

I have long believed that this interdependence defines the new world we live in.

You know, people say, "Well, we're only acting because it's the USA that was attacked." "Double standards," they say. But when Milosevic embarked on the ethnic cleansing of Muslims in Kosovo, we acted. And the skeptics said it was pointless, that we made matters worse, we made Milosevic stronger and look what happened. We won. The refugees went home. The policies of ethnic cleansing were reversed. And one of the great dictators of the last century will finally see justice in this century.

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And I tell you that if Rwanda happened again today as it did in 1993 when a million people were slaughtered in cold blood, we would have a moral duty to act there also.

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We were there in Sierra Leone when a murderous group of gangsters threatened its democratically elected government and people, and we, as a country, should -- and I, as a prime minister, do -- give thanks for the brilliance, dedication and shear professionalism of the British Armed Forces.

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We can't do it all, neither can the Americans. But, you know, the power of the international community could, together, if it choose to. It could, with our help, sort out the blight that is the continuing conflict in the Democratic Republic of the Congo where 3 million people have died through war or famine in the last decade. A partnership for Africa between the developed and the developing world based around a new African initiative, it's there to be done if we find the will.

On our side: provide more aid untied to trade, write off debt, help with good governance and infrastructure, training to the soldiers with U.N. blessing and conflict resolution, encouraging investment and access to our markets so that we practice the free trade we're so fond of preaching.

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BLAIR: But it is a partnership. On the African side: true democracy, no more excuses for dictatorship, abuses of human rights, no tolerance of bad governments from the endemic corruption of some states, to the activities of Mr. Mugabe's henchmen in Zimbabwe...

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... proper commercial, legal and financial systems, the will, with our help, to broker agreements for peace and provide troops to police them. The state of Africa is a scar on the conscience of the world. But if the world, as a community, focused on it, we could heal it. And if we don't, that scar will become deeper and angrier still.

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We could defeat climate change, if we chose to. Kyoto is right. We will implement it and call upon all other nations to do so.

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But it's only a start. With imagination, we could use or find the technologies that create energy without destroying our planet, we could provide work and trade without deforestation. If human kind was able, finally, to make industrial progress without the factory conditions of the 19th century, surely, we have the wit and will to develop economically without despoiling the very environment we depend upon.

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And if we wanted to, we could breath new life into the Middle East peace process, and we must.

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The state of Israel must be given recognition by all; fear from terror, know that it is accepted as a part of the future of the Middle East not its very existence under threat.

And the Palestinians must have justice, the chance to prosper and in their own land as equal partners with Israel...

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We know that it is the only way. Just as we know that, in our own peace process in Northern Ireland, there will be no unification of Ireland except by consent. And there will be no return to the days of Unionist or Protestant Supremacy because those days have no place in the modern world.

So the Unionists must accept justice and equality, the Nationalists. The Republicans must show that they have given up violence, not just a cease-fire, but weapons put beyond use. And not only the Republicans, but those people who call themselves Loyalists, who do by acts of terrorism sully the very name of the United Kingdom.

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We know this also: The values we believe in should shine through what we do in Afghanistan. To the Afghan people, we make this commitment: The conflict will not be the end. We will not walk away as the outside world has done so many times before that. If the Taliban regime changes, we will work with you to make sure its successor is one that is broadbased, that unites all ethnic groups and that offers some way out of the miserable poverty that is your present existence.

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And more than ever before, with every bit as much thought and planning, we will assemble a humanitarian coalition alongside the military coalition so that, inside and outside Afghanistan, the refugees -- 4.5 million in the move even before September 11 -- are given shelter, food and help during the winter months.

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The world community must show as much its capacity for compassion as for force.

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The critics will say, "But how can the world be a community, nations act in their own self-interest." Of course, they do, but what is the lesson of the financial markets, climate change, international terrorism, nuclear proliferation or world trade? It is that our self- interest and our mutual interest are today inextricably woven together.

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This is the politics of globalization. And I realize why people protest against globalization. We watch aspects of it with trepidation, we feel powerless as if we were pushed to and fro by forces far beyond our control. But there is a risk. The political leaders, faced with street demonstrations, pander to the argument rather than answer it. The demonstrators are right to say, "There is injustice, poverty, environmental degradation."

But globalization is a fact, and, by and large, it is driven by people not just in finance, but in communication, in technology, increasingly in culture and recreation, in the world of the Internet, information technology, television. There's going to be globalization. And in trade, frankly, the problem is not there's too much of it. On the contrary, there's too little of it.

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The issue is not how to stop globalization; the issue is how we use the power of community to combine globalization with justice. If globalization works only for the benefit of the few, then it will fail and it will deserve to fail.

But if we follow the principles that have served us here so well at home -- that power, wealth and opportunity must be in the hands of the many, not the few -- if we make that our guiding light for the global economy, then it will be a force for good and an international movement we should take pride in leading.

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ZAHN: There you see a live picture of Prime Minister Blair delivering a powerful and at times defiant speech, repeating what President Bush has said all along, that those who harbor test are just as guilty as those who actually launch the attacks, saying it is Time for Taliban to turnover Osama bin Laden or face the consequences of a military attack. He outlined some of the things the U.S. and its allies might do, talking about trying to disrupt its supplies, trying to get at its military hardware, targeting its troops, not its civilians.

The strongest statement that Prime Minister Blair had to make is -- quote -- "This is battle with only one outcome: our victory, not theirs."

Let's check in with Major Garrett at the White House, Andrea Koppel at the State Department and Tom Mintier in Islamabad for their reaction to people.

Major, as I listen to the speech, I wondered if the White House actually had an involvement with the content of the speech. It was a very strong speech.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Indeed it was, Paula.

You can bet there was constant communication between the White House and prime minister's office, as there has been every day almost since September 11th.

A couple of things jumped out at me. The prime minister making very clear there was no moral ambiguity in this war against terrorism, saying -- also foreshadowing the likely response of the United States and quite possibly British forces. The actions we will take will be proportional and targeted, the prime minister said. He also said to those in his own country who've said there has to be some form of negotiations, some meeting of the minds. He said -- quote -- "There is no meeting of minds, no point of understanding." And as the overall stakes involved here, he said, that as far as the campaign against global terrorism, you must defeat it or be defeated by it, very strong words from the prime minister -- Paula.

ZAHN: OK. Thanks so much, Major. Let's go to Andrea Koppel, who is standing by at the State Department. Andrea, I think the one phrase left out to me was the phrase, this is a battle with only one outcome, our victory, not theirs. Is there any concern there that the bar is being set too high?

ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT: Not really, Paula. But I think the test will be the reaction within the Islamic world, within the Muslim world, because really where this hard sell is, and that's really where a lot of energy of this administration is focused. It's focused in making very clear that this is not a war against Islam, and that if, in fact, the Taliban doesn't handover Osama bin Laden and close down the terrorist network that operates within Afghanistan, that it will be removed from power as well, and it's not because their Islamic.

Something that leapt out at me, I have to say, is the phrase used by Tony Blair, saying "either surrender bin Laden," addressed to the Taliban, "or you will surrender power." He has gone further, at least to my ears, than the Bush administration has, Paula, in explicitly warning the Taliban that they will be removed from power. That's something that the Bush administration has been reluctant to actually spell out. They've been sort of tiptoeing around it, saying that those who harbor terrorist will be forced -- will be treated the same way as the terrorist themselves. And the reason that the Bush administration has been so reluctant to spell out is because of Pakistan. Pakistan after all created the Taliban, and they don't want the Taliban to be removed from power.

And so this is the diplomatic finesse now for the Bush administration, to try to see if there could be another government outside of Afghanistan that would be acceptable to the Pakistani government -- Paula.

ZAHN: And what government would that be?

KOPPEL: Well, it's something that they're working on right now. We're talking about the Afghans diaspora. There are couple of groups. One is known as the Cyprus group, the other the Rome group. Of course headed by the former Afghan king, the deposed king, who lives in Rome. The U.S. has been in contact with the king, as well as trying to help facilitate getting the Afghan diaspora within those groups together, talking to one another such that they could have a government, that may even include elements, moderate elements, of the Taliban, perhaps members of the Northern Alliance. The opposition group in Afghanistan that is ready to go if the Taliban government falls.

ZAHN: All right, Andrea Koppel, thanks so much for that update. Let's go now to Tom Mintier in Islamabad, Pakistan for his reaction.

Tom, before I go to you, I just wanted to bring up a point that Mr. Blair said very early on in speech, where he made it clear he wasn't trying to attack Muslims, but he said that Afghanistan is a place where all other forms of Islam are suppressed.

Any immediate reaction to those words from there?

TOM MINTIER, CNN CORRESPONDENT: Well, I think listening to Tony Blair's speech, he directed a major portion of it at least to the Taliban and to the Afghan people themselves, saying that the Taliban was a regime funded by fear, or founded by fear and funded by the drug trade, saying 90 percent of all the drugs in Britain fund guns for the Taliban, and also saying they would not wage war on the innocent, but find and punish the guilty.

Also offering a promise to the Afghan people, saying when it is all over and after the Taliban is gone, saying they will not leave them. They will continue to offer humanitarian assistance, rebuild the economy of Afghanistan. These are the kind of things people in this region are really interested in hearing. And I think Tony Blair hit all the right notes, if you will, as he tipped off each and every reason why this action if indeed it takes place was being made to take place -- Paula.

ZAHN: So, Tom, ultimately, how do you think this speech does play there?

MINTIER: I think it will probably play very well, because again, it was directed toward the Taliban, it was directed toward Osama bin Laden and his organization, and basically saying that it wasn't going to target innocent people, that they wanted to find and punish the guilty, basically, you know, going on saying to the Taliban was said earlier, surrender the terrorist or surrender power. This was about as direct as you can get as politician, saying that the Taliban, your days are numbered.

ZAHN: All right, CNN's Tom Mintier, thanks so much for that update.

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